September-October | 2018
Documentation matters in real estate professional exception
Can a dentist qualify as a “real estate professional” and be allowed to deduct rental real estate losses? Maybe. This article reviews a U.S. Tax Court case finding that a dentist who also operated a real estate business qualified for the real estate professional exception, based largely on his extensive documentation of the hours he’d spent. A short sidebar reviews a separate case in which an architect’s rental activity losses were upheld by the Tax Court.
Zarrinnegar v. Comm’r , No. 2017-34 (Tax Ct. Jan. 13, 2017)
Franco v. Comm’r , No. 2018-9 (Tax Ct. March 6, 2018)

Recent legislation encourages low income developments
Both the Tax Cuts and Jobs Act (TCJA) and Congress’s massive new spending package received widespread media coverage, but a couple of provisions that incentivize investments in low income housing have largely gone under the radar. One provision in the tax law offers significant tax breaks for investors looking to defer or abate capital gains taxes, while the spending bill boosts the Low Income Housing Tax Credit (LIHTC). This article describes the new qualified opportunity zones and expansion of the LIHTC.

C Corporation acquisitions and the TCJA

Investing in real estate oftentimes means holding the property in diverse types of corporations or partnerships. Investors looking to purchase property held by a C corporation need to know the IRS rules governing this kind of corporation. This article summarizes how the Tax Cuts and Jobs Act affects how C corporations are taxed, and looks at transfer tax issues.

How to opt out of the new partnership audit rules

Many real estate businesses are formed as partnerships, and, beginning this year, the IRS is applying new procedures to its partnership audits. Under the procedures, any adjustments and penalties after an audit generally will be assessed against the partnership itself, rather than against individual partners. Certain partnerships can opt out of the new procedures, though, and the IRS has issued final regulations that explain the who and how of this procedure. This article examines what real estate professionals need to know.

Firm News:
HMWC CPAs & Business Advisors ranked "Top 150" by CalCPA
TUSTIN, CA, SEPTEMBER 18, 2018 – The California Society of CPAs (CalCPA) has ranked HMWC CPAs & Business Advisors (“HMWC”) as one of its “Top 150 CPA firms” in terms of CalCPA membership.  
 
HMWC CPAs & Business Advisors | (714) 505-9000 | (714) 505-9200 F | cpas@hmwccpa.com